Have the Following Data on Three Stocks: If You Are

question 67

Multiple Choice

have the following data on three stocks: If you are a strict risk minimizer, you would choose Stock ____ if it is to be held in isolation and Stock ____ if it is to be held as part of a well-diversified portfolio.

• A)A; A.
• B)A; B.
• C)B; A.
• D)C; A.
• E)C; B.

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Definitions:

Sales

The cumulative amount of money made by a business from selling its goods or services.

Average Collection Period

The average collection period is the average amount of time it takes for a business to receive payments owed by its customers for sales made on credit.

Accounts Receivable

Money owed to a business by its customers for goods or services delivered but not yet paid for.

Sales on Account

Transactions where goods or services are delivered with payment to be made at a later date, typically recorded as accounts receivable.